Helen Clark: Statement to the Development Committee

Statement by Helen ClarkAdministrator of the United Nations Development Programmeand Chair of the United Nations Development Groupto the Development Committee
Tokyo, October 13, 2012

A Challenging Global Context

Decent work is a key vehicle for achieving development goals and translating economic growth into poverty reduction. It is therefore highly appropriate that the Development Committee is giving specific attention to the importance of job creation during these Annual Meetings.

The global economic slowdown has made employment generation more difficult. The sovereign debt crisis in Europe and the slow recovery in the global economy led to millions of job losses in both developed and developing countries. The austerity plans adopted by many developed countries have exacerbated the deficiency in demand, further depressing the labour market.

The protracted crisis is also impacting on international development co-operation. According to the UN Secretary General’s 2012 MDG Gap Task Force Report Official Development Assistance (ODA) has declined in the past two years and trade protection measures have increased. Since the beginning of the financial crisis, around three per cent of world trade is estimated to have been subject to some form of restriction. The example set by development partners which allocate at least 0.7 per cent of their national income to ODA needs to be emulated. Strengthening the multilateral trading system by concluding the Doha development round is also long overdue.

The unfinished business of the Millennium Development Goals (MDGs) should be prioritized. The MDGs, launched in 2000, have mobilized support for development, bringing diverse actors together around common objectives, and guiding development frameworks and national budgets to adopt people-centered policies.

For the post-2015 development agenda to succeed in the same way, it too will need to set targets against which progress can be measured, and be easy to communicate. Discussions on the design of the post-2015 development agenda are gaining prominence. Goals and targets will need to be established across the economic, social, and environmental strands of sustainable development.

Employment generation, as a key means of reducing poverty and boosting prosperity, is central to the post-2015 development agenda. That was fully recognized in the first of the planned UN-organized global thematic consultations on the post-2015 development agenda, held in Tokyo in May. The UN system will support another ten such thematic consultations and more than fifty national consultations, and facilitate a global dialogue with citizens, especially youth, by using social media and other communication tools.

Addressing the Jobs Challenge

As is recognized in the World Bank’s 2013 World Development Report, the world faces a significant jobs challenge. According to the ILO, the global unemployment figure is estimated to have increased from 170 million in 2007 to 200 million in 2012. The projection is that the numbers of people out of work will increase to 206 million in 2016. With work not only being a central part of people’s life and well-being as a source of income, but also a source of human dignity and identity, rising unemployment is a serious cause for concern and needs to be addressed urgently.

Youth are disproportionately affected by unemployment, lower wages, and job precariousness. There are now an estimated 75 million unemployed young people in the world. Jobless rates among young people are expected to worsen as the slow recovery in advanced economies impacts on emerging and developing economies too.

Unemployment among women is high, and women workers tend to be concentrated in low-paid and low-skilled jobs. Women comprise around half the global labour force, but unemployment rates are generally higher for women than for men. This is also true for the female youth unemployment rate. Lower participation rates for young women often reflect cultural factors and the lack of opportunities to combine work and family care.

Other groups have also been traditionally disadvantaged in the labour market. Disability, residence status, ethnicity, age, or long-term unemployment can all constitute serious barriers to employment – in developed and developing countries alike.

The jobs crisis is compounded by forced migration due to lack of economic opportunity or conflict. In 2010, there were 105 million economically active international migrant workers globally. Many of these depend on casual low-paid work under unsafe conditions, with little job security or social protection. They also frequently suffer from discrimination and prejudice.

As we move closer to 2015, the MDG target to achieve full, productive, and decent work globally is unlikely to be met. Annual labour productivity growth has declined since 2002. Between 1990 and 2011, the employment-to-population ratio fell. The proportion of workers living below the US$1.25 a day poverty line remains high. There are still an estimated 1.5 billion vulnerable workers around the world.

The United Nations is committed to supporting developing countries to address their employment challenges in ways which promote poverty reduction and sustainable development. In our view, nine areas deserve particular focus:

1. Supporting agriculture as a major source of employment, income, and food. Higher agricultural productivity increases the incomes of smallholder farmers, creates jobs and non-farm incomes in rural areas, and is vital for food security. Public investments in rural infrastructure, agricultural science, technology and innovation, education, and extension services, and improved access to credit and financial services, especially for women farmers, are important.

2. Creating incentives for building productive industrial capacities. Employment creation calls for supporting productive investments in labour-intensive industries and value chains, including in agro-processing. Here governments can play an important role, in partnership with the private sector, in infrastructure development and through enhanced access to credit and research and technology. Creating an enabling environment is crucial: streamlined procedures for starting new businesses; effective means of dispute resolution; and good product and service standard setting all incentivise private sector investment.

3. Investing in social protection, education, and skills development. Well designed social protection schemes will reduce poverty and inequality, enhance social stability, and serve as automatic stabilizers in times of recession. Social protection programs, such as cash transfers, access to health care, and public employment programmes, are also affordable. Basic social protection programmes are estimated to cost between one and two per cent of GDP. The UN has long advocated for the merits of such programmes, including through the Social Protection Floor Initiative - a UN system-wide initiative to promote strategies for providing access to essential social services and income security for all.

4. Addressing labour market discrimination and earning wages below the poverty line as essential elements for poverty reduction. Policies which are narrowly aimed at employment creation do not automatically translate into poverty reduction. In many developing countries, employees are increasingly finding themselves earning wages below the poverty line, working shorter hours, or being in informal arrangements. Addressing employment discrimination and low income requires a combination of measures, including the removal of discriminatory laws, facilitating access to productive resources such as credit and land, and lessening the constraints on women's time.

5. Linking natural resources management with employment generation. A quarter of the real GDP growth in Sub-Saharan Africa is accounted for by the resource sector, but studies show that the extractive sector, on average, absorbs only about two to four per cent of the work force. Attention therefore needs to be given to how to link the infrastructure and services related to the extractive sectors and to the resource flows from them, to development of job-rich sectors.

6. Focusing on the service sector. Migration and rapid urbanization are pushing employment into low-productivity sectors. Contrary to predictions, the labour force in many developing economies is not moving from traditional activities, such as agriculture, into manufacturing. Instead, workers are taking up jobs in urban, and often informal, service sectors, which tend to offer low productivity and poor quality jobs. Measures to raise productivity levels and wages, as well as to improve working conditions, are needed.

7. Creating an enabling environment for job creation through pro-poor macroeconomic policies. In order to achieve stable economic growth and facilitate employment creation, the following are important

monetary policy which focuses on growth and employment without jeopardizing macro-economic stability;

having the policy space to adopt counter-cyclical fiscal policies;

exchange rate regimes which facilitate trade to support job creation;

measures which minimize the spill-over effects of financial crises;

progressive tax systems and pro-poor public spending - for example, on social protection, employment generation, health, and education.

9. Integrated solutions for sustainable development. The current jobs crisis cannot be solved in isolation from other global challenges. The outcome of Rio+20 highlighted how environmental protection and economic and social development are inter-linked. Ensuring environmental sustainability, however, requires shifts to new production processes and consumption patterns. Social policies and safety nets are indispensable for lessening the impact of adjustments, such as the removal of subsidies on fossil fuels. Sustainable development requires that employment generation goes hand in hand with reductions in greenhouse gas emissions and reversing environmental degradation.

The Global Jobs Pact, developed by the ILO and fully supported by the UN system, offers a pathway for addressing the jobs challenge. The above policy recommendations are consistent with the Pact, which is premised on social dialogue, collective bargaining, and respect for international labour standards. Global leaders, at G8 and G20 meetings, have also acknowledged the Pact as a relevant response to the economic slowdown. The UN is integrating the Global Jobs Pact into its operational activities at the country level.

Addressing the jobs challenge is one of the most important tasks for governments today. Creating employment opportunities for youth, women, and marginalized groups requires special attention. The world has the knowledge, tools, and mechanisms to foster job rich growth, and to make it inclusive and environmentally sustainable. The UN system is working closely with the World Bank Group and the International Monetary Fund in many of these areas, and we are committed to strengthen that collaboration even further.

The Importance of Disaster Risk Management for Development

Building resilience to disasters must be an integral part of all development efforts. According to ISDR, the world has lost US$2 trillion to disaster since 1992, or about 25 years of total development aid. Investing in preparedness and risk reduction works, and it pays. Every dollar invested in risk reduction saves on average seven dollars in response. Risk reduction makes economic sense. It protects our investments and it safeguards development gains. The UN therefore welcomes the attention given to disaster risk management and resilience-building during these Annual Meetings, including at the Sendai Dialogues.

In 2011 alone, almost 30,000 people were killed in 302 disasters, and 206 million people were affected, including 106 million by floods, and sixty million by drought.

The poorest and the most vulnerable are the most affected by disasters. For the poorest, recurring disasters have dire consequences, as they set back and disrupt the long-term progress of poverty reduction and development. This is especially true in drought-prone areas, where households are forced to sell livelihood assets and engage in subsistence activities, making them even more vulnerable and preventing them from escaping the poverty trap. The only way to break this vicious circle is to invest systematically in building the resilience of individuals, communities, and institutions.

In essence, disaster risk reduction is a development issue. Addressing it requires political will, good governance, and long-term approaches. Based on its mandate to address disaster risk reduction at the country level, the UN has long supported countries in successfully reducing their damages and losses from disasters. Over the last decade, countries such as Bangladesh and Mozambique have made impressive gains in this area. But much more needs to be done globally, including by committing the necessary resources for disaster risk reduction and recovery planning.

The importance of designing an effective post-2015 framework for disaster risk reduction cannot be overemphasised. As the 2015 end date of the Hyogo Framework for Action approaches, it is timely to reflect on good practices and lessons learned from its implementation. The voluntary, non-binding nature of Hyogo has worked well, and there is value in exploring a similarly structured voluntary arrangement for beyond 2015. Areas for improvement could include:

moving beyond tracking measures aimed at reducing disaster risks to measuring outcomes in terms of drop in real losses, including economic losses and loss of life;

more convergence with developmental and environment agendas, including in the area of climate change adaptation;

taking into account the reality of a heavily urbanized world and the importance of urban planning and building safer cities, and;

giving greater emphasis to recovery processes.

Exploring new financing mechanisms for disaster reduction is also pertinent. Over the last decade there has been much ‘soft’ investment in disaster reduction, aimed at supporting institutional and legislative frameworks and developing plans and policies. This now needs to be matched with ‘hard’ investments in concrete risk reduction measures, such as the strengthening of meteorological capacities and coastal defence systems. Major costs are involved.

There is a natural complementarity between the work of the UN and the World Bank on disaster risk reduction. Both are building on respective comparative advantage in many countries, but there is always room for more collaboration. The UN stands ready to work with the Bank towards that end, for the benefit of our partner countries.

Leadership

Helen Clark became the Administrator of the United Nations Development Programme on 17 April 2009, and is the first woman to lead the organization. She is also the Chair of the United Nations Development Group, a committee consisting of the heads of all UN funds, programmes and departments working on development issues.